Kree Tech reports first quarter 2008 financial results



    TSX-V: KT

    ST. HUBERT, QC, Sept. 17 /CNW/ - Kree Tech International Corporation
("Kree" or "the Corporation") (TSX-V: KT), an established and recognized
developer and manufacturer of superior pressure-sensitive products for the
healthcare industry, today announced its financial and operating results for
the three month period ended July 31, 2007. All dollar amounts are in Canadian
dollars unless otherwise specified.
    "First quarter sales were slower than expected," said Gregory Moffat, CEO
of Kree. "We see encouraging signs for the second quarter, including a full
production schedule at our Montreal facility. As we approach the breakeven
point our management team is no longer diverting attention to major
cost-cutting measures. We are now completely focused on the growth initiatives
designed to capitalize on the opportunities we see in the Advanced Wound Care
market."

    Financial Review
    ----------------
    Net sales for the first quarter ended July 31, 2007 were $927,000,
compared to $1.3 million in the first quarter of the previous year. The
decrease in revenue was largely attributable to the impact from lower-priced,
lower-quality products imported into the North American market by Asian
competitors, and to a slowdown in customer orders. Additionally, one of Kree's
clients filed for bankruptcy during fiscal 2007 which had a further impact on
comparable sales levels.
    Gross margin improved to $283,000, representing 30.5% of Q1 2008
revenues, compared to $247,000 or 18.5% of revenues in the prior year's first
quarter. The improvement in gross margin was primarily due to the decrease in
fix expenses following the closure of Kree's Plattsburgh, New York plant late
in fiscal 2007, and the consolidation of all U.S. manufacturing operations at
the Clearwater, Florida plant.
    Selling expenses in the first quarter were $80,000, a decline of  
$21,000 from the comparable period last year, primarily due to the Q4 2007
departure of Kree Technologies USA, Inc.'s president, who was not replaced.
Administrative expenses of $211,000 represented a decrease of approximately
$71,000 from the prior year, driven primarily by the consolidation of
facilities.
    Kree's net loss in the first quarter of 2008 was $26,000 or $0.0012 per
share, compared to an after tax loss of $187,000 or $0.0085 per share in    
Q1 2007.
    Full financial information is available on SEDAR at www.sedar.com.

    Outlook
    -------
    Kree has two manufacturing plants for its products - one in St. Hubert,
Quebec, which handles the raw materials, and the other in Clearwater, Florida,
which is a state-of-the-art finishing plant that enables Kree to produce
finished, packaged Advanced Wound Care (AWC) products. The Corporation's cost
base is now better suited to its existing revenue stream. Kree is in a
position where it has a core business that is stable and capable of breaking
even. However, the Corporation still has the capacity for considerable growth
due to its under-utilized plant in Florida and its unique product offerings.
    Kree's Advanced Wound Care treatment offers quicker recovery time, better
healing and less scarring. The Corporation can produce dressings with next
generation attributes such as Ultra Thin Hydrocolloids specifically designed
for the retail market. Many consumers are willing to pay a premium for these
qualities and Kree is working hard to penetrate the companies that service
them. Kree believes that it is well positioned in the AWC market.
    An important near-term objective is to generate sales in the European
marketplace.

    About Kree

    Headquartered in St. Hubert, Quebec, Kree Tech International Corporation
is an established and recognized developer of superior pressure-sensitive
products for the health care industry. For over a decade, Kree has developed
innovative and cost-efficient medical tape products including printed vinyl,
coated plastic and fabric substrates, and bulk finished goods. Kree has also
developed proprietary coating formulations giving its medical bandages greater
effectiveness and versatility. These and other innovations have resulted in
Kree becoming a key supplier to a number of branded and private label
companies. Kree is registered under a number of quality management programs
including ISO 9001-2000 as well as FDA certification required for medical
device manufacturing.

    This release contains various forward-looking statements as of the date
hereof and we undertake no obligation to update these statements regardless of
new developments or otherwise, except in accordance with applicable securities
laws. Statements in this release that are not historical are forward-looking
statements. Such statements are subject to various risks and uncertainties
that could cause actual results to vary materially from those stated. Such
risks and uncertainties include but are not limited to: economic conditions in
various regions, product and price competition, supplier and raw material
prices, foreign currency exchange rate changes, interest rate changes,
increased legal expenses and litigation costs and other risks and
uncertainties described more fully in the Corporation's annual filings on
Sedar.





For further information:

For further information: Greg Moffat, Chief Executive Officer, Kree Tech
International Corporation, (727) 540-9295, gmoffat@kreetech.com

Organization Profile

KREE TECHNOLOGIES INTERNATIONAL CORPORATION

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